appears further, that under the New York Code of Civil Procedure a final judgment dismissing the complaint either before or after trial does not prevent a new action for the same cause of action unless it expressly declares or it appears from the judgment roll that it is rendered upon the merits. (Sec. 1209, New York Code of Civil Procedure.) We, therefore, consider that this court is at liberty, as our mandate has not yet been sent down, to take up this appeal for further consideration. [1, 2] The contract which Romberg made need not be set out in full. The main portion of it was stated in our former opinion. In it Romberg agreed with the present defendants that he would "sell, assign, transfer, and set over and vest" in them the right to print, publish, and sell all compositions which he might write during a period of five years from the date of the agreement. Romberg expressly agreed in the contract that he transferred to Stern & Co., defendants herein, the sole and exclusive publishing right (copyright) of all the compositions "which he is going to write during the next five years." The contract also stated that "in compensation for this transfer of the copyright Stern & Co. will have to pay to Mr. Romberg a share of profits on each copy of each composition, as follows." Then followed a detailed statement as to the royalties to be paid, which it is not important to set forth herein. For reasons stated in our former opinion, and which we do not now find it necessary to enlarge upon, this agreement constituted a valid and binding contract supported by a valuable consideration. The contract was a valid executory agreement to sell and the breach of the agreement could be redressed in an action at law for damages. We are not now concerned with whether it could or could not be enforced specifically in a court of equity. It is enough for us at this time to know that the contract is a valid contract and that it imposes a legal and moral obligation upon Romberg which he has seen fit since to repudiate and renounce. The plaintiffs in this suit who have succeeded to his rights by successive assignments can claim in this court no greater rights than Romberg, the assignor, could himself assert. If Romberg, having entered into this valid agreement to sell and assign to these defendants the musical production herein involved, and having repudiated his agreement and taken out a copyright in his Page 648. own name, had then come into a court of equity to obtain an injunction as against these defendants, restraining them from publishing the song, could he have succeeded? If he could not, the plaintiffs in this suit are not entitled to an injunction, for they stand in his shoes. As assignees their rights are subject to the equities of these defendants as against Romberg, the assignor. The answer to the question does not depend upon whether the original contract Romberg made with the defendants can or cannot be specifically performed. The plaintiffs are in a court of equity which is a court of conscience, which within the scope of its powers is governed by its own rules. It stays its hand and withholds its aid whenever it is asked to do that which it deems to be against conscience. If it is asked to decree specific performance of a valid written contract for the sale of real estate, it refuses to do so and leaves the parties to their rights at law, if it concludes that the party invoking its aid has wrongfully conducted himself in respect to the contract or if the circumstances show that its enforcement would be harsh and unfair. Thus in Mortlock v. Buller (10 Vesey, jr. 292), Lord Eldon, in 1804, said: It is much too late to discuss now whether this court ought to order a contract that it would not specifically perform, to be delivered up and to decree the performance of a contract which it would not order to be delivered up; for the distinction is always laid down that there are many cases in which the party has obtained a right to sue upon the contract at law, and under such circumstances that his conscience cannot be affected here, so as to deprive him of that remedy; and yet on the other hand the court, declaring he ought to be at liberty to proceed at law, will not actively interpose to aid him and specifically perform the contract. And so it has been held that equity will not decree the specific performance of a contract where to do so would necessitate a breach of a prior contract with a third person. (Fry on Specific Performance, 5th ed., with Canadian Notes, sec. 407.) And in similar fashion equity will withhold an injunction when it would be against conscience to grant it. This is based upon the principle that he that hath committed iniquity shall not have equity. As the Supreme Court said in Creath's Administrator v. Sims (5 How. 192, 204, 12 L. Ed. 111, 1847): Whosoever would seek admission into a court of equity must come with clean hands; that such a court will never interfere in opposition to conscience or good faith. * * * This prayer, too, is preferred to a court of conscience, to a court which touches nothing that is impure. The condign and appropriate answer to such a prayer from such a tribunal is this: That, however unworthy may have been the conduct of your opponent, you are confessedly in pari delicto; you cannot be admitted here to plead your own demerits; precisely, therefore, in the position in which you have placed yourself, in that position we must leave you. And see Pope Mfg. Co. v. Gormully, 144 U. S. 224, 236, 12 Sup. Ct. 632, 36 L. Ed. 414, 1891; Haffner v. Dobrinski, 215 U. S. 446, 450, 30 Sup. Ct. 172, 54 L. Ed. 277, 1910; Barnes v. Starr, 64 Conn. 136, 155, 28 Atl. 980, 1894; McCusker v. Spier, 72 Conn. 628, 633, 45 Atl. 1011, 1900; Rudnick v. Murphy, 213 Mass. 470, 471, 100 N. E. 643, Ann. Cas. 1914A, 538, 1913. In our opinion the plaintiffs do not come into this court with clean hands. Their misconduct relates to the matter now in litigation. Their right is the right of Romberg and the latter's misconduct is for the purposes of this suit theirs. Having agreed by a binding contract to assign this song to these defendants, he has not done as he agreed, but has repudiated the legal and moral obligation which the agreement imposed upon him. In doing so he has committed iniquity as respects this copy- Page 649. righted song and the relation of these defendants thereto. And with his hands thus unclean he has no standing in a court of equity in asking an injunction to restrain these defendants from exercising a right which he bound himself to give exclusively to them. As the plaintiffs stand in his shoes we must decline to grant them what we could not grant to Romberg. [3] There is nothing in the fact that the injunction is asked to protect a copyright which takes the case out of the general principle to which we have referred. In Kerr on Injunction (5th ed.), 413, the rule is laid down respecting the right to an injunction in copyright cases as follows: The interference of the court by injunction being founded on pure equitable principles, a man who comes to the court must be able to show that his own conduct in the transaction has been consistent with equity. A book accordingly which is itself piratical can not be protected from invasion, nor will the court protect by injunction a work which is of an immoral, indecent, seditious, or libelous nature, or which is fraudulent. The rule thus stated is well established, and the particular instances the author mentions are not intended to be exhaustive, but simply illustrative of the principle applicable in such cases. In view of the changed judgment entered in the suit brought in the Supreme Court of New York, to which we have herein referred, this court vacates the order it originally made in this suit, and the order of the district court is affirmed. [231 Federal Reporter, pp. 645–649.] HARPER BROS. ET AL. v. KLAW ET AL. (District Court, Southern District New York. January 6, 1916.) Harper v.1. COURTS-JURISDICTION-COPYRIGHTS-SUIT FOR INFRINGEMENTKlaw, Jan. 6, CONTROVERSY WITH LICENSEE. 1916. A suit by the owner of the copyright of a play to enjoin licensees from producing it as a photoplay, which right they claim under their license contract, is one for infringement of copyright, of which a Federal court has jurisdiction, regardless of the citizenship of the parties. 2. COPYRIGHTS-INFRINGEMENT-PLEADING COUNTERCLAIM. Complainant, as owner of the copyright of a play, and defendants, as sole licensees for the production of the play, both claimed the right to produce the play as a photoplay, and complainant brought suit to enjoin such production by defendants as an infringement of the copyright. Held, that under new equity rule 30 (198 Fed. xxvi, 115 C. C. A. xxvi), which provides that a defendant "may without crossbill set out any counterclaim against the plaintiff which might be made the subject of an independent suit in equity against him," the defendants might in their answer by way of counterclaim set up their contract, and ask an injunction to restrain complainant from producing the photoplay as in violation of the contract. 3. COPYRIGHTS-DRAMATIC COMPOSITION-RIGHTS OF LICENSOR AND LICENSEE-PRODUCTION OF PHOTOPLAY. In 1899 complainant, which was the publisher of the novel "Ben Hur," with the consent of the author, who owned the copyright, entered into a contract with defendants by which they were authorized to have written a dramatic version of the novel, to be approved by complainant and the author and copyrighted in the name of complainant, and were given the "exclusive right of producing such dramatic version on the stage," on certain conditions as to the size of the cities where produced, the payment of royalties, and the manner of computing the same; the contract further providing that there should be no change in the text or manner of performance. Held, that the contract did not give defendants moving picture rights in the play, and that its production by them in such form. would be an infringement of the copyright. Held, further, that while such rights were not granted, there was an In equity. Suit by Harper Bros. and Henry L. Wallace against Marc Klaw and Abraham L. Erlanger to restrain threatened infringement of copyright, with - counterclaim for an injunction to restrain violation of contract. On final hearing. Injunction granted on both bill and counterclaim. John Larkin, of New York City, for plaintiffs. David Gerber, of New York City, for defendants. HOUGH, District Judge. Plaintiff Wallace owns the Page 610. copyright of the well-known novel "Ben Hur" and Harper Bros. (a New York corporation) that of an authorized dramatization of the romance made in 1899 by one Young, who was employed for that purpose by the defendant partners, Klaw & Erlanger (both New Yorkers), pursuant to a contract the true meaning of which is the ultimate problem presented by this case. 66 In 1899 Gen. Wallace's novel had long enjoyed popularity, and was known to be in many ways suitable for stage representation, with those spectacular accessories which the improved electrical and mechanical appliances of recent years have rendered possible. With the author's permission, therefore, Harper Bros. (the publishers of Ben Hur) agreed in writing with Klaw & Erlanger that (1) the latter should employ writers to produce “a dramatic version" of the novel; (2) such version should be approved by author and publishers of the novel and copyrighted in the publishers' name; (3) after such approval the producers of the play should have no right to change the text or manner of performance in any material way; but (4) Klaw & Erlanger were granted the sole right (during the life of the copyright, if all conditions were duly complied with) of "producing on the stage," or "performing," the "dramatic version" provided for or created as above described. In the preamble of the contract it is recited as the purpose thereof that the defendants are to obtain "the exclusive right of producing such dramatic version on the stage "; i. e., the dramatic version made by Young and 76228°-17-11 |